June 20, 2025 • 42 mins
In this episode, we sit down with seasoned real estate investor Kevin Bupp, host of two top-rated podcasts and founder of Sunrise Capital Investors, to explore how “boring” assets like mobile home parks and parking garages can deliver outsized, long-term returns.
With over $250 million in real estate transactions under his belt, Kevin shares the fundamentals behind his investment thesis, how he vets assets in today’s tighter market, and why staying focused on simple, cash-flowing niches is key to building durable wealth.
Whether you're a high earner looking to diversify or a passive investor seeking dependable yield, this episode offers a rare look into recession-resilient real estate strategies that actually work.
Connect with Kevin Bupp:
🔗 Website: kevinbupp.com
📍 LinkedIn: linkedin.com/in/kevinbupp
📸 Instagram: @buppkevin
📘 Facebook: facebook.com/RealKevinBupp
💻 Sunrise Capital Investors: https://sunrisecapitalinvestors.com/about/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:42):
Foreign.
Of the Paper Trail podcast, Ihave Kevin Bupp from Sunrise Capital
Investors.
Kevin has been in real estatefor several decades and is heavily
investing in mobile home parksand parking garages.
(01:03):
And different take from ourtraditional recordings about talking
about node investing.
I want to have Kevin onbecause while to talk about other
investment opportunities outthere that people might not be aware
of and we talk heavily intoparking garages which I have a lot
of experience from my pastlife of working in commercial construction
(01:24):
in regards to building, owningand managing those.
So something that I haveexperience with and love.
Just talk and shop with peopleabout that type of strategy and dive
deep.
We also do talk about mobilehome parks, some of the things that
people do well, some of themistakes we've seen people make and
talk about where we see themarket headed.
But what was interesting aboutthis episode that I appreciate is
(01:50):
the topic of investing in realestate and it's not a get rich quick
scheme.
You know, Kevin mentioned puta 20 year vision and plan out there
and just, you know, go withthe flow and try and hit those singles
and doubles because today morethan ever see everybody trying to
be an influencer talking aboutget rich quick schemes and high returns
(02:13):
within real estate.
And the reality is that justis very difficult to replicate over
a long period of time.
And if you stick with it inthe long term, get those singles
and doubles every severalyears you get those bumps which can
provide enhanced returns andcontinue to grow your portfolio.
So hope you enjoy this episodewith Kevin Bupp of Sunrise Capital
Investors.
(02:39):
Hey Kevin, how are you doing today?
Chris?
I'm doing awesome, buddy.
Thanks for having me here.
Excited?
No, no problem.
It's great to have you ontoday and let's just, you know, dive
right into it and let's getpeople up to date on what type of
deals are you working on todayin this fun and illustrious real
estate market.
Yeah, no, so we kind of keepthings boring.
(03:00):
I mean we don't change too much.
You know, we've been buyingmobile home parks for the last 15
years.
About six years ago we startedbuying parking investments.
So parking lots, parking garages.
And so really those, those areour two lanes and we, and we tend
to stick in our lanes and wedon't venture out because ultimately,
you know, we know that ittakes 10, 10,000 plus hours to become,
you know, an absolute expertin your respective niche.
(03:22):
And so we just don't want todilute our focus.
So today we are still activelybuying mobile home parks.
We just closed on one yesterday.
And parking garages, we Justclosed on one of those last week.
So we've actually had a busytwo weeks.
And, And.
And so, no, we're.
You know, our business modelitself hasn't necessarily changed.
Obviously, the market dynamics have.
(03:42):
Have changed quite a bit just,you know, given where.
Where rates are, you know.
But I would say that we've hadthe most active.
23 and 24 were probably someof the busiest years that we've ever
had.
We had some massive growth here.
So we're still buying, we'restill doing deals, and, you know,
I'd say we're just probablymaking a lot more offers and fighting
a lot harder to find the dealsthat actually pencil out and make
(04:04):
economic sense to buy.
Yeah.
What I told people when theyask us has been previously, you'd
be a farmer for deals where goplant some crops, cultivate the relationship,
and they would grow and thedeals would kind of come to you.
Where today you're a hunter,you got to go put on.
Put that bow and arrow and goout in the woods and start hunting
to find it.
It's a lot harder to find thedeals today than it was several years
(04:27):
ago in our space and.
Sounds a little bit like your space.
And quick question in regardsto the parking garages, which I find
fascinating because I had afamily friend when I lived and worked
up in Boston who owns severalgarages, and they're really interesting
(04:48):
in regards to.
It's such a small amount ofcompanies, it seems, or people who
get involved in it, and it'sactually a lot more complex from
what I've seen and involved in it.
I know, again, mobile homeparks, that's one avenue.
But what caused, you know, youalso to.
I want to use term shift, butalso get involved in the parking
(05:10):
garages, because thatfascinates me.
Yeah, I mean, you know, itaccidentally happened probably about
eight years ago.
I had a guy on my podcast, Iwas interviewing him, and, you know,
I like to kind of expandoutside the normal realms when I
bring folks my show.
Like, I do kind of the majorfood groups, right.
And.
But.
But I like to venture outevery once in a while and do some
(05:31):
unique things that.
That just are interesting to me.
And one of them happened to beparking years back.
And I brought a guy on theshow and I.
I didn't know anything aboutthe business model.
There was no resources on it.
You know, from the outsidelooking in.
It's a pretty straightforward,simple model.
Right.
People pull in, they park,they pay a flat fee, and then they
leave.
Right.
It is.
It is way More complex than that.
There's, there's.
The dynamics are.
Are much more vast than justa, you know, pay an hourly rate,
(05:56):
stay for five hours, and then,you know, the arm goes up and you
leave.
And so.
But I, I interviewed this guyon my show, and I was so intrigued
at the end of the interview,and I had so many more questions
that I literally called himback up.
We talked for another hour.
I flew him to Tampa, spent aday with him, and still was like,
man, like, I'm trying to pokeholes in this, in this business model.
And so, you know, we, backthen, we're just mobile home parks.
(06:19):
And again, we do not want todilute our focus.
But my business partner, Iwere so intrigued and we were trying
to find, you know, reasons whyparking wasn't a great investment
and, you know, had a lot ofsimilarities in mobile home parks.
You know, you know, 15 yearsago, mobile home parks, it was a
very fragmented niche.
It's.
It's quickly becomingconsolidated, but it was very fragmented
niche.
(06:40):
They weren't building newones, right?
And so you got this supplydemand imbalance and, and that, and
there's.
Those are same thingshappening in the parking sector.
Again, it was a veryfragmented space.
And I was like, man, there'ssomething here.
So anyway, we just, we spentyears going to conferences, meeting
other parking owners andoperators and.
And we finally just took, youknow, took the dive in 2020 is when
we bought that first parking asset.
(07:00):
So I guess, you know, toanswer your question, just, you know,
a lot of similarities to.
To.
To our current business.
But I think the biggest onethat really sold us was and really
two things.
Number one was, you know, andwe're very specific on what we buy
and where we buy.
The one we just closed onliterally, is in his downtown historic
Philadelphia.
It's a block away from theLiberty Bell block away from Independence
(07:21):
hall.
Literally.
The parking supply isincredibly constrained in that area.
You cannot build a new parking garage.
Another one will never beconstructed in the.
In the same vein that the onewe currently bought and on street
parking is an absolutenightmare, right?
And so, like, it'sirreplaceable real estate that actually
cash flows incredibly well today.
And a lot of what we buy also, we.
(07:42):
We.
We've been buying it frominstitutions recently.
And what you'll find is theyown things for a number of years
and they get a little lazylater on, you know, in their investment
term.
And there's.
So there's a lot of meat lefton that bone when we take it over
and have a much more, muchmore granular approach.
And so, but, but the secondpiece that we really liked that really
just got us excited was thatyou know, every, our mobile home
(08:04):
park business, we'revertically integrated with the property
management.
So every time we buy anotherproperty we bring on additional staff.
Right.
And we've got an incrediblylarge staff.
You know, when you look at theinvestment side and the property
management side of our, of ourbusiness, of our organization and,
and, and the, the propertymanagement is not the sexy side of
the business.
However, it's a necessary evil.
There's not any, there's notreally any great third party property
(08:26):
management companies thatspecialize in mobile home park space.
We, we tested that road.
They, they're not great.
So if you want to be in thespace, you have to build it in house,
right?
Yeah.
The parking sector is a little different.
There's a number both locally,regionally and nationally parking
outfits, most that haveincredibly elaborate technology platforms,
some that are in publiclytraded companies.
(08:47):
It's.
And so we, we felt veryconfident in our ability to find
best in class and have a lotof options in these big markets that
we're in.
So that we knew that webought, bought a parking asset.
Really the only thing weneeded to have was our asset management
house.
Like we need to find theopportunity to have the asset management
house.
But we could literally grow byhundreds of millions of dollars at
AUM without actually hiringadditional employees.
(09:09):
And that was intriguing to us.
So we could expand ourbusiness, we could 2x our business,
our AUM, and not necessarilyhave to hire more people to do it.
So that, that was also a, itwas a, it was a, the expansion model
was very clear and, and, and,and achievable without us having
to literally, you know, hire abunch of additional folks in house.
So just a couple things thatreally got us excited about it.
(09:31):
So anyway, it took us a coupleof years, we studied it for a couple
years, finally bought thefirst asset in 2020 and have been
buying, you know, one or twoper year since.
That's interesting because afew things you mentioned I say resonate
with us as well.
Which is the first is stayingin your lane and staying focused
on what it is we like to doand do and not chasing that shiny
(09:53):
object of going from shortterm rentals to this to that and
certain funds that I see out there.
They've got a mobile homepark, a self storage, a multifamily,
a single family, a short termrental, a debt fund.
And I look at it from thestandpoint of I don't know if they're
successful or not.
I know I wouldn't want to haveto manage that many different asset
(10:15):
classes because again, thenumber of people you'd have to bring
in that are experts in thatwould be overwhelming and interesting.
Parking.
I'm just curious becauseinvolved with Washington D.C.
worked, we developedproperties and also company that
I worked for owned a lot of properties.
You hit the nail on the headwhere with those you don't really
(10:36):
need to hire companies because there's.
I mean, hire people becausethere's companies that come in and
basically either manage it foryou or I know in certain markets
they'll actually like masterlease it from you and they just pay
you and then they, you know,will collect.
You know, if they make money, great.
If they don't, bad.
Like during COVID you know, Iknow company I work for, they had
to renegotiate with, I thinkwas like Metropolitan or I forgot
(10:58):
which company because theykind of like own the parking rights
to the property and collectedall the fees and stuff.
But during COVID it's likewe're not getting anything.
So.
Yeah, so we have.
We have both.
Yeah.
So to your point, we have anumber of parking assets that we
literally are.
They're on a trip, not lease,where there's an operator that's
leasing it.
Yeah.
We're getting our returns andit's secure and they get any of the
(11:21):
upside, but they also take thedownside risk.
Right.
And then we've got otherarrangements where we felt it was
in our best interest given,you know, the variety of circumstances,
just to keep a managementagreement in place.
Right.
And then basically, you know,manage that manager.
And these management companies are.
Most of the ones we use are.
They're really big names.
They've got, again, reallyrobust technology platforms that
(11:42):
we would never be able to replicate.
They've been building them out for.
For decades and decades andare much more advanced on that side.
They're really softwarecompanies with personnel is what
they are.
That's really what the parkingworld has come to.
So we leverage that expertisethat exists and again, it's allowed
us to buy very large assetsand great markets and not necessarily,
again, have to expand much ofour team to do so.
(12:04):
Yeah.
I find again, the parkinginteresting why everyone thinks it
sounds boring.
It's like, you're right.
It's a software company whereit's very similar to.
I almost like flight data.
They know historical data, howmany people come in at what times
and every.
I mean, it's amazing theAmount of information that those
companies have on their garages.
(12:26):
I love boring businesses.
Exactly.
So when you're buying, youknow, mobile home parks and the parking,
you know, are you buying, youknow, value add, you know, they stabilize.
Are they seriously distressedor is it a mix of everything?
You know, yeah, we've doneeverything over the years, you know,
our last couple of funds andyou know, I guess our, I'll speak
(12:46):
to our current fund.
It's a growth and income fundand I would say if I had to bifurcate
the two, that the, the incomeportion is more related to that of
the parking assets.
I mean, they're throwing offcash flow day one and, and there's
still some upside there, butthese are core, core or core plus
assets and you know, just somemajor markets throughout the country.
And then our, our, I'd saythat our, our, our growth side of
(13:09):
the fund is more related tothe mobile home.
That's not always the case.
But most of the mobile homeparks we buy there, there's a value
add component to it.
There's a little bit of aheavy lift where we're going to go
in and up, up, you know,upgrade the infrastructure, the amenities,
bring some new home inventoryin, take it from 78% occupancy to
98% occupancy over the nextthree years and you know, recapture
(13:30):
a loss, the lease that maybesometimes could be as much as 20
or 30%.
So, so they, they work reallywell together.
Like we blend them together inour fund.
This is our second fund wherewe've actually blended MH assets
along with parking assets.
And it's, it's, it's been abeautiful marriage.
Are you doing 506C or five,you know, what's your.
(13:50):
We've always, we've alwaysdone five sixes and don't, don't
necessarily plan on changinganytime soon.
Seems to work really well for us.
Yep.
No, hey, again, goes back tosticking what works for you.
So, you know, I know somepeople in that space have done the
506Bs and stuff like that, butmost people I know, you know, prefer
the 506C so.
(14:10):
Well, I just, I, and I neverunderstood that, you know, I never
understood the, you know, oneversus the other.
I understand the nuance witheach one, but you know, the, the
506C, I guess the 560.
You can take more nonsophisticated investors if I understand
that right.
But they've got to be, youknow, immediate relationships that
you can't do any general solicitation.
(14:31):
Correct.
But I feel like, you know,again the, the, the, the, the ability
to do general solicitation,kind of build your, your brand, your
network has always been moreappealing to me.
And so anyway to, to each his own.
Right.
But we've always gone with 560just for that reason so that we could
talk about it to the world, tothe masses.
I would say over the years,while we still do five or six C's
and we, and we, and we promoteit to the masses, we have really
(14:54):
taken a strong emphasis overthe last three years to really go
deeper within our existingnetwork than wider to a new network.
So just really work withinvestors that have been with us
for many, many years andvarious funds and, and work with
their friends, family,colleagues, you know, kind of get
more deeper into the roots ofit all with, with folks that know
(15:15):
who we are, they understandour track record, they've been with
us years.
It's just a, it's a, it's aneasier sales pitch.
Right.
It's not even a sales pitch atthat point in time.
Right.
Like it's a proven concept.
And so rather than trying toeducate new folks while we still
do that, you know, it's, it'smuch more difficult to bring a new
sale into the equation, a newinvestor into the equation.
Yeah, we've, you know, overthe last 12 months, you know, we
(15:37):
actually, we use a regulationA offering so gets the best of both
worlds of we solicit but wecould also accept non accredited
funds.
But what we found is again themajority of capital in flowing right
now is primarily reinvestorsor I'll call it friends of investors
and just getting comfortablewith understanding who you are and
(16:01):
having that track record.
And the simple thing I alwaystell people is I just want to do
what I say I was going to do,you know, and if something changes,
I'll let you know.
I try.
You know, I don't want to haveyou know, any bodies buried in the
back.
It's, hey look, you know,here, here's what's going on.
So you know, and you know,talking kind of shifting a little
(16:21):
bit, you know, about thatcapital structure and so forth, you
know, in regards to financingyour assets, you know, with the interest
rates, you know, now I thinkI'll use the term stabilize in regards
to, you know, they're not, youknow, have been shot up, you know,
three, 300 bips, you know,recently and stuff, you know, they're
still fluctuating.
(16:42):
But has that changed how youstructure your deals?
Or have you got any morecreative or you know, change a lot
within your.
No, not really.
Again just back to the growthand income piece of it.
You know, pretty much everyparking asset we buy, it's got a
positive yield to it goinginto it even with where the rates
are at today.
You know, with, with reallyour what we shoot for with the.
(17:04):
With with the parking assets,again they're the income.
Really the income engine ofour growth and income fund is to
reach a stabilized yield ofabout a you know, 150 basis points
over.
Over our.
Our.
Over our debt.
Right.
And typically we like to beable to reach that in the.
The first 12 to 18 months,most months.
It's a pretty.
Parking's prettystraightforward when it comes to
(17:25):
value enhancement.
It's most of the time it's,it's rate adjustments and technology
upgrades.
You'll drive a lot of thatvalue enhancement.
And then you know, some of theadditional kind of longer term value
enhancement might be gettingadditional monthly contracts with
big parking groups or localbusinesses and things like that in
the region.
But a lot of it's really justadjusting transient and monthly parking
(17:48):
rates that are already inplace and upgrading technology to
create more efficiencies inthe you know, ingress egress operations.
So and then you know, in theyou know, again same kind of the
back to the original point of,of the mobile home parks are really
a lot of the growth strategy.
So while we're still you know,there might be a few deals that we
bought that had positive yieldright from the get go.
(18:08):
However I would say that themajority do not.
They're you know, negativeleverage at least going into them
but they've got a significantloss to lease and a our ability to
within a you know, we like tolook at a one to two year span to
where we get to a, a positiveyield as far as the business plan
goes.
And so and then we right nowwe're only putting five year debt
(18:29):
on everything that we're doingfive year fixed debt.
Knowing that I think there's amore chance than not that rates will
hopefully, you know, subsideat some point next five years and
that will you know, do a recapat that period of time.
So we're not locking in any,any 10 year even when we could.
We're not locking in any 10year debt.
Like a lot of the parkingstuff we do.
We've done some CMBs.
(18:49):
We, we've got a local bank outof Chicago, not local to us, but
out of Chicago that's actuallybeen offering a great product to
us.
They Love parking.
They just land on our seconddeal and they gave us a 10 year option,
10 year non recourse fixedoption, a 7 year as well.
But we went with the 5 justbecause again, I feel, I feel very
confident that we'll findourselves in a lower rate environment
(19:10):
here in the next five years.
I hope I'm right, but Ibelieve that time is on our side
there.
Yeah.
And you know, the interestingthing, I also think with parking,
again like you mentioneddowntown Philly is, you know, there's
more back to work, back tooffice people, you know, there's
still.
People forget how long ittakes for things to like filter through
in real estate or just life in general.
(19:30):
I mean Covid is over fiveyears old, which it just feels like
yesterday for some of us as well.
And you know, things startingto take effect.
I'm curious just again, thisis just my own knowledge.
Yeah.
You know, in the parkingspace, you know, like now, now in
our area, for example, theyhave, you know, special toll lanes
(19:50):
that you can pay and it'sbasically the pricing is based on
usage.
And I'm curious like, oh, Iwonder when parking garages are going
to get to that point of.
Okay, like first, you know,between these hours.
Like okay, when they get the50 occupancy, you know, early bird
rate.
But once they hit like 90%,you know, they, the, the pricing
for the day almost likeadjusts as it does.
(20:12):
Okay.
They have that.
It's already there.
It's already there.
Yeah.
Dynamic pricing based.
Yeah.
We know how many cars are in,cars are out.
We know that, you know, the,the heightened time today, we've
got special events alreadyprogrammed into the, into, into the
system.
You know, so when, you know,if we're near a major, you know,
sports arena or a music venue,something like that, we know when
(20:32):
all that stuff's happening andwe do, we typically in those types
of events.
So we'll have outside of likenormal day to day traffic, we'll
have an attendant there aswell to help really monitor like
we're digitally monitoring.
We've already got a programbut like we can make adjustments
on the fly as well as well.
But you know, you made acomment, I want to provide some clarity
there.
You made a comment about like,you know, folks getting back to work,
(20:53):
this, that and the other.
And I would say the one thingthat that's unique about what we
buy is I, I am, I, I do nothave a lot of confidence as to what
the long term outlook is likefor office.
Right.
And there's Certain marketswhere office is, has become, it's
resilient.
Like there's been a flight to quality.
All the A class stuff is likeit's got high occupancy and it's
doing great.
But more, more speaking to theyou know the older buildings that
(21:15):
have got vacancy, they'refunctionally obsolescent and you
know they're, they're greatlocations but like it's just, it's
kind of like a race to thebottom right like you know, cutting
rates.
They don't have enough moneyto inject back into these properties.
It's just a downward death spiral.
And a lot of parking, a lot of it.
Not stuff we buy but a lot ofit was originally built decades ago
to, to support really office users.
(21:37):
Like that was a big piece of it.
It might have supportedtransient traffic and events stadiums
and arenas and things like that.
But a big parkers that are indowntown areas were going to an office
right?
They were visiting an office,working from an office.
And so one of our like we've,we've got a buy box and you know
there's got to be a variety ofdemand drivers.
It's got to be pretty diversein nature.
(21:59):
Transients the most valuableof all of them poke folks that are
coming because there's,there's, there's, there's enough
amenities and attractions inthe local area variety of attractions
and amenities in the localarea that are, that are attracting
transient traffic.
Or it could be restaurants,bars, nightclubs but typically a
variety of things that areattracting transient people that
are coming and going you knowon a multi hour hourly basis on a
(22:20):
day by day.
The second is you know, sportsarenas, events.
Third be like government.
Fourth is hotels.
You know over most hotels inurban core areas don't have enough
parking.
They, they use ancillarygarages for their valet.
There's contracts with them.
And then the last one if itexists at all is office.
And it's got to be thesmallest of the entire stack of the
(22:41):
demand drivers.
For us if it makes up amajority of those demand drivers
it's a no go for us.
I don't care if the locationis great.
I don't know how to fix theoffice problem.
And I can promise you anyparking we look at is nowhere near.
At least the office parkers isnowhere near what it was in a pre
covered world.
And so and I don't know whenthat's ever going to go back, if
(23:02):
it ever will.
And so I'm not the, the geniethat has the answer There.
And so like the, the officeparking piece of it, the folks that
are driving downtown to workin office is the smallest part of
the demand stack for us.
In fact, like the one inPhilly, the interesting thing about
that one, it's really uniquein that 67 of the parkers in that,
in that parking garage aretransient, which is great because
(23:23):
it's literally in historic Philadelphia.
I mean there's so manyattractions and people come to visit
year round, right.
And so even if one of thoseattractions goes away, guess what,
there's multitudes of others, right?
There's no parking in Philly.
My daughter goes there and wego up to visit and we end up usually
honestly we take the train upand because the Amtrak's 90 minute
train ride because to try anddrive up there and then hit the traffic
(23:46):
in park and like for peoplethat I know just go in there and
again there's a lot of peoplegoing in and out for just multiple
reasons into a city like Philadelphia.
Well, here's the most amazingthing about parking as well, or not
the most, but like one of theother really encouraging things about
it for us.
And just the, the long termtailwinds I feel like it has in its
favor is a lot of the majorcities across the country, they've
(24:09):
eliminated the, in fact,Houston was the most recent one,
I think Houston or Dallas, Ithink it was Houston just a couple
weeks ago.
Most of the major citiesacross the country have eliminated
the parking requirements fornew developments.
You know, basically what usedto happen is if you were a developer,
you wanted to go build a, aoffice tower or a mixture tower or
a multi family condo, tower,hotel, whatever it might be.
(24:30):
For every thousand square feetyou had to put in a certain amount
of parking.
They had a formula, whetheryou said you needed it or not.
Guess what?
Didn't matter.
Yeah, you got to put it in.
And so you found a lot ofcities found themselves back in like
the 80s and 90s with excesssupply parking.
They had too much of it.
It was being used and, andit's, you know, not as good for the
tax basis like you know, inthe developer given the option like
(24:51):
they're going to build another10 condo units versus that of like
20 parking spaces.
Right.
And so now what you find ismajor cities is the parking supply
is shrinking and it'sshrinking fast.
And any new developments thathave parking don't even necessarily
have enough parking for whatthey're, what they're building.
Like developer gets to makethe decision of how much parking
he puts in and most are makingthe choice to say, well, I'm putting
(25:12):
300 multi family units.
And while that might haverequired, you know, 280 parking units,
I, I believe that half my, youknow, half my folks actually, you
know, they'll figure out othermeans of transportation.
So for that reason I'm onlygoing to put in 140 or whatever it
is.
Right.
And so it's just the shrinkingsupply, it's happening in all these
major markets across the country.
And so it just creates a goodsupply demand imbalance for us, you
(25:33):
know, for us to have oneparking asset that can't be rebuilt,
we're buying things for belowreplacement costs.
You would not be able toconstruct it today what we paid for
it, nor would you be allowed.
Shifting a little bit over to,you know, the mobile home park side.
You know, have you seen inthat avenue any major market shifts
(25:58):
in that or any major changesin that asset class over the last
two, three years?
I know there's a lot of peoplegetting involved in it, which we'll
talk about, you know, and thefollow up question.
But I'm just curious ifthere's been any major, you know,
changes in that type of thingaround the, the demand.
Has remained incredibly strong.
(26:18):
In fact, I am still baffled.
You know, deals that we misson that we make offers on that get
awarded to someone else.
You know, even when we'relike, you know, kind of trying to
stretch to get there and thenwatching, seeing what they trade
for, like I'm still seeingthings that are trading for sub 5
caps.
Wow.
There, there's the one, Iguess the one thing that's worked
in our favor is we were notoverly aggressive in, you know, 2020,
(26:41):
2021 and you know, leadinginto late 2022, before rates started
taking their, their rise up,you know, folks were just overly
aggressive buying everythingthey could because of historically
low rates.
And you know, we just had ahard time making a lot of things
pencil knowing that like rateswouldn't stay that low forever.
And so we were, you know,underwriting recaps at, you know,
5 or 6% interest rates, whichis kind of where we're at now.
(27:02):
Not saying that I knew thefuture, I just knew that it wouldn't
stay that low forever.
Right?
Yep.
And so what that did is whilewe, we bought, we bought some great
assets during those years, weactually sold, we took advantage
of the market and sold at somepeak pricing prices that I couldn't
even make sense of.
And we owned assets for many years.
I'm like, I don't know howsomeone's paying this for it.
Right.
But it put us in a really goodposition in 2023 and 2024 to go kind
(27:26):
of on a buying rampage.
And, you know, there weren't alot of the buyers got pushed on the
sidelines, kind of runningdamage control on maybe things they
were paid for.
Right.
Or the, their liquidity dried up.
And so it gave us anopportunity to kind of buy some phenomenal
assets and great markets forthose two years.
And, and I'm seeing now I'mseeing buyers that had historically
(27:47):
been on the sidelines, evensome big institutional groups that
have been on the sidelinesfinally stepping back in, which I
don't like, but it is what itis, right?
Like, competition is a goodthing to a certain degree.
So we, I would say I, I feelvery happy to know that we took advantage
of, of kind of a bull run, atleast for us, over the last two years
when others were, you know,there was, they were kind of, either
they had fear or uncertaintyor again, they, they just, they,
(28:11):
they, they, they grew andexpanded so fast.
And it was in those prioryears that now it's like, okay, we,
we got to figure out how tooperate what we have in this new
environment and not buyanything new and add on to the top
of it.
So if somebody wanted to getinvolved in mobile home parks, and
I'm not one of those people,which I again, I think they're awesome
(28:33):
investment.
It's just I'm already stressedand again, I focus on what to do,
but I know people who listenand want to get involved in certain
things.
You know, two questions I haveis like, for your parks, do you also
own the homes or you just, youknow, try and lease as much, you
know, basically just groundrent as much as possible.
And then secondly, I was goingto ask what are some, what are some
(28:54):
of the biggest mistakes yousee people make in that asset class?
Yeah, no.
Two great questions.
You know, in a perfect world,Chris, we wouldn't own any of the
homes because really, to us,the business model, it's a land lease
business model.
You know, we own the, theroads, the pads, all that.
And we basically lease it tothe, to the residents.
And then they maintain theirhomes, right?
They maintain the plumbing,their home, the electrical in their
(29:17):
home, the roof in their home,the H vac, Right.
All those things that cost alot of money when you have rentals.
And so.
But we don't live in a perfect world.
And while we do have a numberof communities that are 100% resident
owned.
Meaning that we just do a landlease model.
We've got many others, most ofwhich we've inherited from a prior
owner to where, you know, weown either maybe, maybe as low as
(29:40):
like five homes in thecommunity or as many as I think we
own a few communities where wemight own 80 or 90 homes.
But I would say that ourbusiness model has always been to
when we acquire a communitythat where we own homes, it's to
sell them off.
It's to make it a, you know,buy them at a good price and then,
you know, make a compelling,you know, a compelling, a compelling
(30:01):
enough reason for the, for therenters to either buy that home,
convert into homeowners orwhen that rental turns to basically
put it on for sale versus forrent and find someone that actually
is looking to buy a home andthen get that thing off our balance
sheet so, so that we can getit back to more of a land lease model.
So I think in our portfolio, Ithink, I think we have, I think we
(30:23):
have about 4 or 500 homeswhich makes up about, about 10 of
our, of our entire lot countor our pads.
And so it's not huge, but it'sdefinitely we, we own quite a bit.
And the second piece that the set.
I'm sorry, I'm drawing a blank now.
Your second mistakes.
Yeah, mistakes.
Yeah, I would say just like,you know, for folks that are buying
(30:46):
stuff if they're new, thebiggest mistakes are you during due
diligence.
But where most folks can losea lot of money on a, on a deal is
what you can't see below the ground.
Right.
Just, you know, spending timeand money and hiring professionals
to run due diligence on the infrastructure.
A lot of these parks are built50, 60, 70 years ago.
And depending what type ofsoil you know, they're in and material
(31:08):
that was used, thatinfrastructure underground could
absolutely eat your lunch ifyou don't know what you're getting
yourself into to where youknow, you didn't run sewer scopes
and you find out that sewer'sfailing in multiple sections of the
park and you got to replaceyour whole sewer line system, which
not, not just from a coststandpoint but a, just it's intrusive
to all your residents that areliving there.
You got tear up roads and,and, and it's incredibly costly.
(31:30):
So on top of that, you know,might have a sewage issue for a period
of time while you put newlines in.
So things like that or evenprivate utilities.
People that buy parks thathave, and we own A lot of parks that
have well systems that servicethe entire park, or a wastewater
treatment plant, which isbasically like a miniaturized version
of the type of treatment plantthat's in the city where you live
today that.
That treats sewage.
(31:50):
Those things, they takeprofessionals to operate them.
They take professionals tocreate budgets for them.
You need to understand, youknow, what the life expectancy of
all the equipment is and, youknow, budget accordingly for repairs
and maintenance and upkeep andall those things.
Right.
And, you know, wastewatertreatment, they could be, you know,
minimum million bucks up ashigh as, like, $3 million.
And if you buy a park that'sgot one that's failing, not only
(32:13):
do you have a money problem,but you also have a problem to where.
Yeah, absolutely.
Residents that can't livethere if they can't have their sewage
treated.
Right.
So same thing with, like, awell system.
Same thing.
I knew a guy who bought apark, and he's like, oh, I got it
on seller financing, you know,creative, this deal and stuff.
And, you know, I was talkingto him, and, you know, I was just
intrigued, asking a bunch of questions.
(32:33):
And first question I usuallyask him, like, oh, I'm just curious,
like, was it on a.
You know, I say, I use septicsystem, but, you know, private systems,
or.
Because it was like, 15 homes,it was small.
And I'm like, Or, you know,was public and stuff.
He goes, oh, good.
He's looked at me.
He's like, oh, that's a good question.
I don't know.
And I'm like, don't know.
(32:54):
I'm like, if you have to go,like, you know.
And again, you.
You know, parks like that.
I'm like, it could be 15little separate septic systems.
Or I'm like, you have no idea.
He's like, no, but I got agood deal, and I haven't put any
money into it.
And I was like, oh, my God.
Oh.
So it was somebody, you know,basically, you know, own some real
(33:14):
estate.
And I was like, oh, I wantedto buy a mobile home park, and somebody
offered it to him.
And, you know, he's like, oh,I didn't have to, you know, basically,
seller financing.
Didn't have to put it, youknow, put very little money down
into it.
Now he's trying to figure itout on the fly.
And I'm like, oh, that's not agood way to figure out real estate.
So, yeah, no, I mean, like, there's.
There's certain propertiesI've seen over the years.
Maybe, like, small parks like that.
Or in rural markets or, like,they have, you know, failing systems.
(33:37):
It's like, you couldn't giveme that.
Like, really, like, even justbecause you got it for free doesn't
mean that you actually shouldtake it.
Right.
Because now not only it couldactually cost you money, but liability.
There's some major liabilitythat you step into when you've got
residents that you're supposedto serve and, you know, if they're
in a well system or, you know, they're.
There's sewage that's flowingthrough the park because your system's
failing, it's a big deal.
(33:57):
And you might end up on thefront page of the newspaper for the
wrong reason.
Yeah.
When people always, you know,ask like, oh, you know, what could
I get sued for?
And stuff like that, you know,with an LLC or whatnot, I'm like,
that's one of the ways youcould get sued because it's, you
know, basically common maintenance.
But as we wrap up thisepisode, I'm just curious, you know,
(34:19):
get your opinion of where youthink markets, real estate markets
are headed over the next kindof 12, 24 months now.
And, you know, now say justoverall markets, but and then also
in kind of the spaces that youplay in, you know, just love to get.
And again, nobody has acrystal ball.
Yeah.
This is not financial advice,people, you know, so.
Yeah, and I'm not, I'm not aneconomist, honestly, like, how we,
(34:41):
how we look at things is we,we, we intimately understand our
two niches that we're in.
And, and, and, and I, and I, you.
For, for me, it's alwayslocation first.
Right.
That.
So, like, the fundamentalshave never changed.
Who cares where rates are?
Who cares what prices are?
Who cares where foreclosurerates are?
It doesn't really.
It's all irrelevant.
Like, the general fundamentalshave not changed.
So first and foremost, ifyou're buying, and I can just speak
(35:05):
to, you know, mobile homeparks and parking, but it's really
applicable to every other typeof real estate multifamily, which
is struggling right now.
But if you buy, if you buy itin the right location, in an incredibly
desirable location as a highdemand and high need for your product,
and you buy at the right basisand you execute your business model
as you've laid out, then itshouldn't matter where we're at in
(35:28):
the economic cycle.
Right.
Like, you know, I think where,where things became challenged, you
know, and I'll speak tomultifamily because it's the one
that's having the hardest Timeright now is, is the overly aggressive
nature that that space got to,but also how aggressive the business
plans were as far as you know,you know, you know, double digit
(35:49):
rent increases weren't goingto continue forever, right?
Like a class C building andturn it to A high B, low A, like
the location plays into that factor.
Like yeah, absolutely.
Yeah.
At some, at some point likeyou know, you know the music has
to stop at that and so likeyeah, the fundamentals, like I think
the fundamentals has got outof whack and people just saw dollar
(36:11):
signs but didn't see reality.
And so again I just, justreally getting back to the basics
and I, and for us it's, it'salways been a slow and steady while
we've had a great last twoyears and we've grown significantly,
we've hired some great talentfor us it's like, you know, slow
and steady always wins therace and that's hard sometimes.
And I would say that some ofthe biggest shows that we had and
internally as an organization,more, more as it relates to myself
(36:33):
and my business partner.
Brian was in, in the heydaywhen there was a lot of capital flowing
around in 20, 20, 2021, 22.
He's, he's on the capitalraising side and we were turning
money away and I'm like Brian,I don't know what to tell like I,
I can't find deals that makesense, right.
And so we're not going to buy.
It's okay, things will changebut like we're not going to buy just
to buy.
And so for that reason we turnmoney away.
(36:54):
That probably went somewhereelse, right?
But it put us in a greatposition to buy when things made
sense to buy.
And so again it's all aboutjust playing the cycles.
It's a long term game, right?
Like this isn't a, you mightget a few pops in the first couple
of years if you're in the business.
But you know, just know thatlike you better have like a 20 horizon
really.
Like this is like get in andknow you just get settled, get settled
for the ride and you'll lookback in 20 years and be very happy
(37:17):
that you were patient and juststeady along the way rather than
trying to only hit home runs, right?
Like just hit really goodsingles and doubles every once in
a while.
You know, a home run or even agrand slam will come along.
But you know singles anddoubles and, but location is the
first and foremost.
Like if it's, if it's aninferior location, just move on.
I Don't like your, your buddy.
I don't care if you even getthe deal for free, right?
(37:38):
It's just, it's.
Nothing's ever free.
Nothing's ever free.
Move on.
No.
And two things that I sayrelate to us and that I preach a
lot that you hit, hit on isagain the singles and doubles.
And unfortunately everythingon the Internet and social media
today is basically like thehome runs at a grand Slams.
And then the other is get richquick, people.
(38:01):
Oh, make this much your firstyear or that year or you can do this
or you can do that.
You know, people, you know,real estate is the long game.
And you mentioned 20 years.
You know, that's, you know,that's a long time for people.
And people got to realize, youknow, the way the markets work.
And I remember I bought myfirst house in 2001 and I sold it
in 2004 and basically itappreciated about 3% to 4% per year.
(38:26):
And by the time you paid, youknow, the closing costs and everything
else and the brokers andagents, I'm like, you know, I paid
225 grand for my first house.
Now I may have made like 10 or15 grand on it, which I'm like, wow,
that's a lot of money and stuff.
And I think people got spoiledby all the money that was in the
markets that people are makingon these deals, especially on some
(38:49):
of these single family andother deals where, you know, you
buy a house and it's worth$50,000 more, just like it was in
0607 and you know, early 08and like, oh, real estate's easy.
I'm going to be a millionairein three years.
It's like, no, that usuallythat's, that's very rare for people.
And it's like anything, it's avery long play.
Not a.
(39:09):
Yeah, you can't look at thisas a 12 to 24, 36 month horizon.
You shouldn't look anythingless than, I'd say five to ten.
Five years I think is evenshort, but ten years.
Yeah, I always tell people,you know, you look at what you, what
it looks like in 10.
Yeah, I agree.
And I, and there's faster waysto make money.
I mean, you know, like if youwant to go actively buy a business
(39:29):
and run a business, you know,outside of real estate, I, I think
that you can find incrediblereturns and an opportunity to create
cash flow and, but like you'regoing to be, you know, you're going
to be grinding there as well,probably even a lot more than that
of what you're, what you'regoing to do in your.
And whatever type of realestate you buy.
So, but it's again, you know,slow and steady really wins a race
(39:49):
in my mind.
And if you're, if you havethat mentality, I do believe that
you're going to find there'sgoing to be, you know, maybe it's
every, every other year, everythree years, you're going to get
those, those, those triplesand those pops.
Right.
That just, they just likeelevate your overall returns.
Right.
Wherever you're looking atmore of a linear.
What's the next 10 or 20 yearsgoing to look like?
You're getting these bigspikes that really elevate that overall
average return over that lifespan.
(40:10):
So.
Yep.
So, yeah, I mean, you lookback 20 years from today, and that
was 2005, things were popping.
And then of course, you know,we know it happened a few years later,
but I bet you everybody whoowned property in 2005, wherever
it was located, if it was agood location, still wish they held
it versus probably selling itor forced to sell.
So I'm one of those.
Yeah.
(40:31):
Great.
Well, Kevin, thanks for comingon today.
How can people reach out to you?
Yeah, no, I appreciate that, Chris.
If you want to learn moreabout Sunrise Capital Investors,
our group, you can go toinvestwithsunrise.com we've got a
lot of good resources there.
We've got our, our currentofferings up there.
We got some webinars, but wealso got case studies of, of deals
that we've, that we currentlyown, deals that we've gone full cycle
(40:52):
on.
And outside of that, you know,I'm pretty active on LinkedIn and
Instagram and a little bit onFacebook as well.
But my name's unique enough towhere just type in my first and last
name, Kevin.
Last name, bup, Bull on any ofthose social platforms and, and I
should be the first one thatcomes up there.
But I, I'd say LinkedIn of allof them, I'm pretty active on, but
you can reach out to methrough any of those platforms as
(41:12):
well and, and get a response.
Yeah.
And if people are interestedin, again, investing in their offerings,
if, you know, you know, themotorhome parks or the parking, which
again, I don't see a lot ofpeople, operators sponsoring those
because it's such a niche andwhen you can find somebody with that
expertise, it's somebody thatyou kind of want to hold on to.
So appreciate you coming ontoday, Kevin.
(41:35):
And as always, for peoplelistening, if you like this episode,
please share it with yourgroup and leave us a review on your
favorite listening station.
So thanks for coming on,Kevin, and thank you all for listening.
Foreign.
Of the Paper Trail podcast, Ihave Kevin Bupp from Sunrise Capital
Investors.
Kevin has been in real estatefor several decades and is heavily
investing in mobile home parksand parking garages.
(01:03):
And different take from ourtraditional recordings about talking
about node investing.
I want to have Kevin onbecause while to talk about other
investment opportunities outthere that people might not be aware
of and we talk heavily intoparking garages which I have a lot
of experience from my pastlife of working in commercial construction
(01:24):
in regards to building, owningand managing those.
So something that I haveexperience with and love.
Just talk and shop with peopleabout that type of strategy and dive
deep.
We also do talk about mobilehome parks, some of the things that
people do well, some of themistakes we've seen people make and
talk about where we see themarket headed.
But what was interesting aboutthis episode that I appreciate is
(01:50):
the topic of investing in realestate and it's not a get rich quick
scheme.
You know, Kevin mentioned puta 20 year vision and plan out there
and just, you know, go withthe flow and try and hit those singles
and doubles because today morethan ever see everybody trying to
be an influencer talking aboutget rich quick schemes and high returns
(02:13):
within real estate.
And the reality is that justis very difficult to replicate over
a long period of time.
And if you stick with it inthe long term, get those singles
and doubles every severalyears you get those bumps which can
provide enhanced returns andcontinue to grow your portfolio.
So hope you enjoy this episodewith Kevin Bupp of Sunrise Capital
Investors.
(02:39):
Hey Kevin, how are you doing today?
Chris?
I'm doing awesome, buddy.
Thanks for having me here.
Excited?
No, no problem.
It's great to have you ontoday and let's just, you know, dive
right into it and let's getpeople up to date on what type of
deals are you working on todayin this fun and illustrious real
estate market.
Yeah, no, so we kind of keepthings boring.
(03:00):
I mean we don't change too much.
You know, we've been buyingmobile home parks for the last 15
years.
About six years ago we startedbuying parking investments.
So parking lots, parking garages.
And so really those, those areour two lanes and we, and we tend
to stick in our lanes and wedon't venture out because ultimately,
you know, we know that ittakes 10, 10,000 plus hours to become,
you know, an absolute expertin your respective niche.
(03:22):
And so we just don't want todilute our focus.
So today we are still activelybuying mobile home parks.
We just closed on one yesterday.
And parking garages, we Justclosed on one of those last week.
So we've actually had a busytwo weeks.
And, And.
And so, no, we're.
You know, our business modelitself hasn't necessarily changed.
Obviously, the market dynamics have.
(03:42):
Have changed quite a bit just,you know, given where.
Where rates are, you know.
But I would say that we've hadthe most active.
23 and 24 were probably someof the busiest years that we've ever
had.
We had some massive growth here.
So we're still buying, we'restill doing deals, and, you know,
I'd say we're just probablymaking a lot more offers and fighting
a lot harder to find the dealsthat actually pencil out and make
(04:04):
economic sense to buy.
Yeah.
What I told people when theyask us has been previously, you'd
be a farmer for deals where goplant some crops, cultivate the relationship,
and they would grow and thedeals would kind of come to you.
Where today you're a hunter,you got to go put on.
Put that bow and arrow and goout in the woods and start hunting
to find it.
It's a lot harder to find thedeals today than it was several years
(04:27):
ago in our space and.
Sounds a little bit like your space.
And quick question in regardsto the parking garages, which I find
fascinating because I had afamily friend when I lived and worked
up in Boston who owns severalgarages, and they're really interesting
(04:48):
in regards to.
It's such a small amount ofcompanies, it seems, or people who
get involved in it, and it'sactually a lot more complex from
what I've seen and involved in it.
I know, again, mobile homeparks, that's one avenue.
But what caused, you know, youalso to.
I want to use term shift, butalso get involved in the parking
(05:10):
garages, because thatfascinates me.
Yeah, I mean, you know, itaccidentally happened probably about
eight years ago.
I had a guy on my podcast, Iwas interviewing him, and, you know,
I like to kind of expandoutside the normal realms when I
bring folks my show.
Like, I do kind of the majorfood groups, right.
And.
But.
But I like to venture outevery once in a while and do some
(05:31):
unique things that.
That just are interesting to me.
And one of them happened to beparking years back.
And I brought a guy on theshow and I.
I didn't know anything aboutthe business model.
There was no resources on it.
You know, from the outsidelooking in.
It's a pretty straightforward,simple model.
Right.
People pull in, they park,they pay a flat fee, and then they
leave.
Right.
It is.
It is way More complex than that.
There's, there's.
The dynamics are.
Are much more vast than justa, you know, pay an hourly rate,
(05:56):
stay for five hours, and then,you know, the arm goes up and you
leave.
And so.
But I, I interviewed this guyon my show, and I was so intrigued
at the end of the interview,and I had so many more questions
that I literally called himback up.
We talked for another hour.
I flew him to Tampa, spent aday with him, and still was like,
man, like, I'm trying to pokeholes in this, in this business model.
And so, you know, we, backthen, we're just mobile home parks.
(06:19):
And again, we do not want todilute our focus.
But my business partner, Iwere so intrigued and we were trying
to find, you know, reasons whyparking wasn't a great investment
and, you know, had a lot ofsimilarities in mobile home parks.
You know, you know, 15 yearsago, mobile home parks, it was a
very fragmented niche.
It's.
It's quickly becomingconsolidated, but it was very fragmented
niche.
(06:40):
They weren't building newones, right?
And so you got this supplydemand imbalance and, and that, and
there's.
Those are same thingshappening in the parking sector.
Again, it was a veryfragmented space.
And I was like, man, there'ssomething here.
So anyway, we just, we spentyears going to conferences, meeting
other parking owners andoperators and.
And we finally just took, youknow, took the dive in 2020 is when
we bought that first parking asset.
(07:00):
So I guess, you know, toanswer your question, just, you know,
a lot of similarities to.
To.
To our current business.
But I think the biggest onethat really sold us was and really
two things.
Number one was, you know, andwe're very specific on what we buy
and where we buy.
The one we just closed onliterally, is in his downtown historic
Philadelphia.
It's a block away from theLiberty Bell block away from Independence
(07:21):
hall.
Literally.
The parking supply isincredibly constrained in that area.
You cannot build a new parking garage.
Another one will never beconstructed in the.
In the same vein that the onewe currently bought and on street
parking is an absolutenightmare, right?
And so, like, it'sirreplaceable real estate that actually
cash flows incredibly well today.
And a lot of what we buy also, we.
(07:42):
We.
We've been buying it frominstitutions recently.
And what you'll find is theyown things for a number of years
and they get a little lazylater on, you know, in their investment
term.
And there's.
So there's a lot of meat lefton that bone when we take it over
and have a much more, muchmore granular approach.
And so, but, but the secondpiece that we really liked that really
just got us excited was thatyou know, every, our mobile home
(08:04):
park business, we'revertically integrated with the property
management.
So every time we buy anotherproperty we bring on additional staff.
Right.
And we've got an incrediblylarge staff.
You know, when you look at theinvestment side and the property
management side of our, of ourbusiness, of our organization and,
and, and the, the propertymanagement is not the sexy side of
the business.
However, it's a necessary evil.
There's not any, there's notreally any great third party property
(08:26):
management companies thatspecialize in mobile home park space.
We, we tested that road.
They, they're not great.
So if you want to be in thespace, you have to build it in house,
right?
Yeah.
The parking sector is a little different.
There's a number both locally,regionally and nationally parking
outfits, most that haveincredibly elaborate technology platforms,
some that are in publiclytraded companies.
(08:47):
It's.
And so we, we felt veryconfident in our ability to find
best in class and have a lotof options in these big markets that
we're in.
So that we knew that webought, bought a parking asset.
Really the only thing weneeded to have was our asset management
house.
Like we need to find theopportunity to have the asset management
house.
But we could literally grow byhundreds of millions of dollars at
AUM without actually hiringadditional employees.
(09:09):
And that was intriguing to us.
So we could expand ourbusiness, we could 2x our business,
our AUM, and not necessarilyhave to hire more people to do it.
So that, that was also a, itwas a, it was a, the expansion model
was very clear and, and, and,and achievable without us having
to literally, you know, hire abunch of additional folks in house.
So just a couple things thatreally got us excited about it.
(09:31):
So anyway, it took us a coupleof years, we studied it for a couple
years, finally bought thefirst asset in 2020 and have been
buying, you know, one or twoper year since.
That's interesting because afew things you mentioned I say resonate
with us as well.
Which is the first is stayingin your lane and staying focused
on what it is we like to doand do and not chasing that shiny
(09:53):
object of going from shortterm rentals to this to that and
certain funds that I see out there.
They've got a mobile homepark, a self storage, a multifamily,
a single family, a short termrental, a debt fund.
And I look at it from thestandpoint of I don't know if they're
successful or not.
I know I wouldn't want to haveto manage that many different asset
(10:15):
classes because again, thenumber of people you'd have to bring
in that are experts in thatwould be overwhelming and interesting.
Parking.
I'm just curious becauseinvolved with Washington D.C.
worked, we developedproperties and also company that
I worked for owned a lot of properties.
You hit the nail on the headwhere with those you don't really
(10:36):
need to hire companies because there's.
I mean, hire people becausethere's companies that come in and
basically either manage it foryou or I know in certain markets
they'll actually like masterlease it from you and they just pay
you and then they, you know,will collect.
You know, if they make money, great.
If they don't, bad.
Like during COVID you know, Iknow company I work for, they had
to renegotiate with, I thinkwas like Metropolitan or I forgot
(10:58):
which company because theykind of like own the parking rights
to the property and collectedall the fees and stuff.
But during COVID it's likewe're not getting anything.
So.
Yeah, so we have.
We have both.
Yeah.
So to your point, we have anumber of parking assets that we
literally are.
They're on a trip, not lease,where there's an operator that's
leasing it.
Yeah.
We're getting our returns andit's secure and they get any of the
(11:21):
upside, but they also take thedownside risk.
Right.
And then we've got otherarrangements where we felt it was
in our best interest given,you know, the variety of circumstances,
just to keep a managementagreement in place.
Right.
And then basically, you know,manage that manager.
And these management companies are.
Most of the ones we use are.
They're really big names.
They've got, again, reallyrobust technology platforms that
(11:42):
we would never be able to replicate.
They've been building them out for.
For decades and decades andare much more advanced on that side.
They're really softwarecompanies with personnel is what
they are.
That's really what the parkingworld has come to.
So we leverage that expertisethat exists and again, it's allowed
us to buy very large assetsand great markets and not necessarily,
again, have to expand much ofour team to do so.
(12:04):
Yeah.
I find again, the parkinginteresting why everyone thinks it
sounds boring.
It's like, you're right.
It's a software company whereit's very similar to.
I almost like flight data.
They know historical data, howmany people come in at what times
and every.
I mean, it's amazing theAmount of information that those
companies have on their garages.
(12:26):
I love boring businesses.
Exactly.
So when you're buying, youknow, mobile home parks and the parking,
you know, are you buying, youknow, value add, you know, they stabilize.
Are they seriously distressedor is it a mix of everything?
You know, yeah, we've doneeverything over the years, you know,
our last couple of funds andyou know, I guess our, I'll speak
(12:46):
to our current fund.
It's a growth and income fundand I would say if I had to bifurcate
the two, that the, the incomeportion is more related to that of
the parking assets.
I mean, they're throwing offcash flow day one and, and there's
still some upside there, butthese are core, core or core plus
assets and you know, just somemajor markets throughout the country.
And then our, our, I'd saythat our, our, our growth side of
(13:09):
the fund is more related tothe mobile home.
That's not always the case.
But most of the mobile homeparks we buy there, there's a value
add component to it.
There's a little bit of aheavy lift where we're going to go
in and up, up, you know,upgrade the infrastructure, the amenities,
bring some new home inventoryin, take it from 78% occupancy to
98% occupancy over the nextthree years and you know, recapture
(13:30):
a loss, the lease that maybesometimes could be as much as 20
or 30%.
So, so they, they work reallywell together.
Like we blend them together inour fund.
This is our second fund wherewe've actually blended MH assets
along with parking assets.
And it's, it's, it's been abeautiful marriage.
Are you doing 506C or five,you know, what's your.
(13:50):
We've always, we've alwaysdone five sixes and don't, don't
necessarily plan on changinganytime soon.
Seems to work really well for us.
Yep.
No, hey, again, goes back tosticking what works for you.
So, you know, I know somepeople in that space have done the
506Bs and stuff like that, butmost people I know, you know, prefer
the 506C so.
(14:10):
Well, I just, I, and I neverunderstood that, you know, I never
understood the, you know, oneversus the other.
I understand the nuance witheach one, but you know, the, the
506C, I guess the 560.
You can take more nonsophisticated investors if I understand
that right.
But they've got to be, youknow, immediate relationships that
you can't do any general solicitation.
(14:31):
Correct.
But I feel like, you know,again the, the, the, the, the ability
to do general solicitation,kind of build your, your brand, your
network has always been moreappealing to me.
And so anyway to, to each his own.
Right.
But we've always gone with 560just for that reason so that we could
talk about it to the world, tothe masses.
I would say over the years,while we still do five or six C's
and we, and we, and we promoteit to the masses, we have really
(14:54):
taken a strong emphasis overthe last three years to really go
deeper within our existingnetwork than wider to a new network.
So just really work withinvestors that have been with us
for many, many years andvarious funds and, and work with
their friends, family,colleagues, you know, kind of get
more deeper into the roots ofit all with, with folks that know
(15:15):
who we are, they understandour track record, they've been with
us years.
It's just a, it's a, it's aneasier sales pitch.
Right.
It's not even a sales pitch atthat point in time.
Right.
Like it's a proven concept.
And so rather than trying toeducate new folks while we still
do that, you know, it's, it'smuch more difficult to bring a new
sale into the equation, a newinvestor into the equation.
Yeah, we've, you know, overthe last 12 months, you know, we
(15:37):
actually, we use a regulationA offering so gets the best of both
worlds of we solicit but wecould also accept non accredited
funds.
But what we found is again themajority of capital in flowing right
now is primarily reinvestorsor I'll call it friends of investors
and just getting comfortablewith understanding who you are and
(16:01):
having that track record.
And the simple thing I alwaystell people is I just want to do
what I say I was going to do,you know, and if something changes,
I'll let you know.
I try.
You know, I don't want to haveyou know, any bodies buried in the
back.
It's, hey look, you know,here, here's what's going on.
So you know, and you know,talking kind of shifting a little
(16:21):
bit, you know, about thatcapital structure and so forth, you
know, in regards to financingyour assets, you know, with the interest
rates, you know, now I thinkI'll use the term stabilize in regards
to, you know, they're not, youknow, have been shot up, you know,
three, 300 bips, you know,recently and stuff, you know, they're
still fluctuating.
(16:42):
But has that changed how youstructure your deals?
Or have you got any morecreative or you know, change a lot
within your.
No, not really.
Again just back to the growthand income piece of it.
You know, pretty much everyparking asset we buy, it's got a
positive yield to it goinginto it even with where the rates
are at today.
You know, with, with reallyour what we shoot for with the.
(17:04):
With with the parking assets,again they're the income.
Really the income engine ofour growth and income fund is to
reach a stabilized yield ofabout a you know, 150 basis points
over.
Over our.
Our.
Over our debt.
Right.
And typically we like to beable to reach that in the.
The first 12 to 18 months,most months.
It's a pretty.
Parking's prettystraightforward when it comes to
(17:25):
value enhancement.
It's most of the time it's,it's rate adjustments and technology
upgrades.
You'll drive a lot of thatvalue enhancement.
And then you know, some of theadditional kind of longer term value
enhancement might be gettingadditional monthly contracts with
big parking groups or localbusinesses and things like that in
the region.
But a lot of it's really justadjusting transient and monthly parking
(17:48):
rates that are already inplace and upgrading technology to
create more efficiencies inthe you know, ingress egress operations.
So and then you know, in theyou know, again same kind of the
back to the original point of,of the mobile home parks are really
a lot of the growth strategy.
So while we're still you know,there might be a few deals that we
bought that had positive yieldright from the get go.
(18:08):
However I would say that themajority do not.
They're you know, negativeleverage at least going into them
but they've got a significantloss to lease and a our ability to
within a you know, we like tolook at a one to two year span to
where we get to a, a positiveyield as far as the business plan
goes.
And so and then we right nowwe're only putting five year debt
(18:29):
on everything that we're doingfive year fixed debt.
Knowing that I think there's amore chance than not that rates will
hopefully, you know, subsideat some point next five years and
that will you know, do a recapat that period of time.
So we're not locking in any,any 10 year even when we could.
We're not locking in any 10year debt.
Like a lot of the parkingstuff we do.
We've done some CMBs.
(18:49):
We, we've got a local bank outof Chicago, not local to us, but
out of Chicago that's actuallybeen offering a great product to
us.
They Love parking.
They just land on our seconddeal and they gave us a 10 year option,
10 year non recourse fixedoption, a 7 year as well.
But we went with the 5 justbecause again, I feel, I feel very
confident that we'll findourselves in a lower rate environment
(19:10):
here in the next five years.
I hope I'm right, but Ibelieve that time is on our side
there.
Yeah.
And you know, the interestingthing, I also think with parking,
again like you mentioneddowntown Philly is, you know, there's
more back to work, back tooffice people, you know, there's
still.
People forget how long ittakes for things to like filter through
in real estate or just life in general.
(19:30):
I mean Covid is over fiveyears old, which it just feels like
yesterday for some of us as well.
And you know, things startingto take effect.
I'm curious just again, thisis just my own knowledge.
Yeah.
You know, in the parkingspace, you know, like now, now in
our area, for example, theyhave, you know, special toll lanes
(19:50):
that you can pay and it'sbasically the pricing is based on
usage.
And I'm curious like, oh, Iwonder when parking garages are going
to get to that point of.
Okay, like first, you know,between these hours.
Like okay, when they get the50 occupancy, you know, early bird
rate.
But once they hit like 90%,you know, they, the, the pricing
for the day almost likeadjusts as it does.
(20:12):
Okay.
They have that.
It's already there.
It's already there.
Yeah.
Dynamic pricing based.
Yeah.
We know how many cars are in,cars are out.
We know that, you know, the,the heightened time today, we've
got special events alreadyprogrammed into the, into, into the
system.
You know, so when, you know,if we're near a major, you know,
sports arena or a music venue,something like that, we know when
(20:32):
all that stuff's happening andwe do, we typically in those types
of events.
So we'll have outside of likenormal day to day traffic, we'll
have an attendant there aswell to help really monitor like
we're digitally monitoring.
We've already got a programbut like we can make adjustments
on the fly as well as well.
But you know, you made acomment, I want to provide some clarity
there.
You made a comment about like,you know, folks getting back to work,
(20:53):
this, that and the other.
And I would say the one thingthat that's unique about what we
buy is I, I am, I, I do nothave a lot of confidence as to what
the long term outlook is likefor office.
Right.
And there's Certain marketswhere office is, has become, it's
resilient.
Like there's been a flight to quality.
All the A class stuff is likeit's got high occupancy and it's
doing great.
But more, more speaking to theyou know the older buildings that
(21:15):
have got vacancy, they'refunctionally obsolescent and you
know they're, they're greatlocations but like it's just, it's
kind of like a race to thebottom right like you know, cutting
rates.
They don't have enough moneyto inject back into these properties.
It's just a downward death spiral.
And a lot of parking, a lot of it.
Not stuff we buy but a lot ofit was originally built decades ago
to, to support really office users.
(21:37):
Like that was a big piece of it.
It might have supportedtransient traffic and events stadiums
and arenas and things like that.
But a big parkers that are indowntown areas were going to an office
right?
They were visiting an office,working from an office.
And so one of our like we've,we've got a buy box and you know
there's got to be a variety ofdemand drivers.
It's got to be pretty diversein nature.
(21:59):
Transients the most valuableof all of them poke folks that are
coming because there's,there's, there's, there's enough
amenities and attractions inthe local area variety of attractions
and amenities in the localarea that are, that are attracting
transient traffic.
Or it could be restaurants,bars, nightclubs but typically a
variety of things that areattracting transient people that
are coming and going you knowon a multi hour hourly basis on a
(22:20):
day by day.
The second is you know, sportsarenas, events.
Third be like government.
Fourth is hotels.
You know over most hotels inurban core areas don't have enough
parking.
They, they use ancillarygarages for their valet.
There's contracts with them.
And then the last one if itexists at all is office.
And it's got to be thesmallest of the entire stack of the
(22:41):
demand drivers.
For us if it makes up amajority of those demand drivers
it's a no go for us.
I don't care if the locationis great.
I don't know how to fix theoffice problem.
And I can promise you anyparking we look at is nowhere near.
At least the office parkers isnowhere near what it was in a pre
covered world.
And so and I don't know whenthat's ever going to go back, if
(23:02):
it ever will.
And so I'm not the, the geniethat has the answer There.
And so like the, the officeparking piece of it, the folks that
are driving downtown to workin office is the smallest part of
the demand stack for us.
In fact, like the one inPhilly, the interesting thing about
that one, it's really uniquein that 67 of the parkers in that,
in that parking garage aretransient, which is great because
(23:23):
it's literally in historic Philadelphia.
I mean there's so manyattractions and people come to visit
year round, right.
And so even if one of thoseattractions goes away, guess what,
there's multitudes of others, right?
There's no parking in Philly.
My daughter goes there and wego up to visit and we end up usually
honestly we take the train upand because the Amtrak's 90 minute
train ride because to try anddrive up there and then hit the traffic
(23:46):
in park and like for peoplethat I know just go in there and
again there's a lot of peoplegoing in and out for just multiple
reasons into a city like Philadelphia.
Well, here's the most amazingthing about parking as well, or not
the most, but like one of theother really encouraging things about
it for us.
And just the, the long termtailwinds I feel like it has in its
favor is a lot of the majorcities across the country, they've
(24:09):
eliminated the, in fact,Houston was the most recent one,
I think Houston or Dallas, Ithink it was Houston just a couple
weeks ago.
Most of the major citiesacross the country have eliminated
the parking requirements fornew developments.
You know, basically what usedto happen is if you were a developer,
you wanted to go build a, aoffice tower or a mixture tower or
a multi family condo, tower,hotel, whatever it might be.
(24:30):
For every thousand square feetyou had to put in a certain amount
of parking.
They had a formula, whetheryou said you needed it or not.
Guess what?
Didn't matter.
Yeah, you got to put it in.
And so you found a lot ofcities found themselves back in like
the 80s and 90s with excesssupply parking.
They had too much of it.
It was being used and, andit's, you know, not as good for the
tax basis like you know, inthe developer given the option like
(24:51):
they're going to build another10 condo units versus that of like
20 parking spaces.
Right.
And so now what you find ismajor cities is the parking supply
is shrinking and it'sshrinking fast.
And any new developments thathave parking don't even necessarily
have enough parking for whatthey're, what they're building.
Like developer gets to makethe decision of how much parking
he puts in and most are makingthe choice to say, well, I'm putting
(25:12):
300 multi family units.
And while that might haverequired, you know, 280 parking units,
I, I believe that half my, youknow, half my folks actually, you
know, they'll figure out othermeans of transportation.
So for that reason I'm onlygoing to put in 140 or whatever it
is.
Right.
And so it's just the shrinkingsupply, it's happening in all these
major markets across the country.
And so it just creates a goodsupply demand imbalance for us, you
(25:33):
know, for us to have oneparking asset that can't be rebuilt,
we're buying things for belowreplacement costs.
You would not be able toconstruct it today what we paid for
it, nor would you be allowed.
Shifting a little bit over to,you know, the mobile home park side.
You know, have you seen inthat avenue any major market shifts
(25:58):
in that or any major changesin that asset class over the last
two, three years?
I know there's a lot of peoplegetting involved in it, which we'll
talk about, you know, and thefollow up question.
But I'm just curious ifthere's been any major, you know,
changes in that type of thingaround the, the demand.
Has remained incredibly strong.
(26:18):
In fact, I am still baffled.
You know, deals that we misson that we make offers on that get
awarded to someone else.
You know, even when we'relike, you know, kind of trying to
stretch to get there and thenwatching, seeing what they trade
for, like I'm still seeingthings that are trading for sub 5
caps.
Wow.
There, there's the one, Iguess the one thing that's worked
in our favor is we were notoverly aggressive in, you know, 2020,
(26:41):
2021 and you know, leadinginto late 2022, before rates started
taking their, their rise up,you know, folks were just overly
aggressive buying everythingthey could because of historically
low rates.
And you know, we just had ahard time making a lot of things
pencil knowing that like rateswouldn't stay that low forever.
And so we were, you know,underwriting recaps at, you know,
5 or 6% interest rates, whichis kind of where we're at now.
(27:02):
Not saying that I knew thefuture, I just knew that it wouldn't
stay that low forever.
Right?
Yep.
And so what that did is whilewe, we bought, we bought some great
assets during those years, weactually sold, we took advantage
of the market and sold at somepeak pricing prices that I couldn't
even make sense of.
And we owned assets for many years.
I'm like, I don't know howsomeone's paying this for it.
Right.
But it put us in a really goodposition in 2023 and 2024 to go kind
(27:26):
of on a buying rampage.
And, you know, there weren't alot of the buyers got pushed on the
sidelines, kind of runningdamage control on maybe things they
were paid for.
Right.
Or the, their liquidity dried up.
And so it gave us anopportunity to kind of buy some phenomenal
assets and great markets forthose two years.
And, and I'm seeing now I'mseeing buyers that had historically
(27:47):
been on the sidelines, evensome big institutional groups that
have been on the sidelinesfinally stepping back in, which I
don't like, but it is what itis, right?
Like, competition is a goodthing to a certain degree.
So we, I would say I, I feelvery happy to know that we took advantage
of, of kind of a bull run, atleast for us, over the last two years
when others were, you know,there was, they were kind of, either
they had fear or uncertaintyor again, they, they just, they,
(28:11):
they, they, they grew andexpanded so fast.
And it was in those prioryears that now it's like, okay, we,
we got to figure out how tooperate what we have in this new
environment and not buyanything new and add on to the top
of it.
So if somebody wanted to getinvolved in mobile home parks, and
I'm not one of those people,which I again, I think they're awesome
(28:33):
investment.
It's just I'm already stressedand again, I focus on what to do,
but I know people who listenand want to get involved in certain
things.
You know, two questions I haveis like, for your parks, do you also
own the homes or you just, youknow, try and lease as much, you
know, basically just groundrent as much as possible.
And then secondly, I was goingto ask what are some, what are some
(28:54):
of the biggest mistakes yousee people make in that asset class?
Yeah, no.
Two great questions.
You know, in a perfect world,Chris, we wouldn't own any of the
homes because really, to us,the business model, it's a land lease
business model.
You know, we own the, theroads, the pads, all that.
And we basically lease it tothe, to the residents.
And then they maintain theirhomes, right?
They maintain the plumbing,their home, the electrical in their
(29:17):
home, the roof in their home,the H vac, Right.
All those things that cost alot of money when you have rentals.
And so.
But we don't live in a perfect world.
And while we do have a numberof communities that are 100% resident
owned.
Meaning that we just do a landlease model.
We've got many others, most ofwhich we've inherited from a prior
owner to where, you know, weown either maybe, maybe as low as
(29:40):
like five homes in thecommunity or as many as I think we
own a few communities where wemight own 80 or 90 homes.
But I would say that ourbusiness model has always been to
when we acquire a communitythat where we own homes, it's to
sell them off.
It's to make it a, you know,buy them at a good price and then,
you know, make a compelling,you know, a compelling, a compelling
(30:01):
enough reason for the, for therenters to either buy that home,
convert into homeowners orwhen that rental turns to basically
put it on for sale versus forrent and find someone that actually
is looking to buy a home andthen get that thing off our balance
sheet so, so that we can getit back to more of a land lease model.
So I think in our portfolio, Ithink, I think we have, I think we
(30:23):
have about 4 or 500 homeswhich makes up about, about 10 of
our, of our entire lot countor our pads.
And so it's not huge, but it'sdefinitely we, we own quite a bit.
And the second piece that the set.
I'm sorry, I'm drawing a blank now.
Your second mistakes.
Yeah, mistakes.
Yeah, I would say just like,you know, for folks that are buying
(30:46):
stuff if they're new, thebiggest mistakes are you during due
diligence.
But where most folks can losea lot of money on a, on a deal is
what you can't see below the ground.
Right.
Just, you know, spending timeand money and hiring professionals
to run due diligence on the infrastructure.
A lot of these parks are built50, 60, 70 years ago.
And depending what type ofsoil you know, they're in and material
(31:08):
that was used, thatinfrastructure underground could
absolutely eat your lunch ifyou don't know what you're getting
yourself into to where youknow, you didn't run sewer scopes
and you find out that sewer'sfailing in multiple sections of the
park and you got to replaceyour whole sewer line system, which
not, not just from a coststandpoint but a, just it's intrusive
to all your residents that areliving there.
You got tear up roads and,and, and it's incredibly costly.
(31:30):
So on top of that, you know,might have a sewage issue for a period
of time while you put newlines in.
So things like that or evenprivate utilities.
People that buy parks thathave, and we own A lot of parks that
have well systems that servicethe entire park, or a wastewater
treatment plant, which isbasically like a miniaturized version
of the type of treatment plantthat's in the city where you live
today that.
That treats sewage.
(31:50):
Those things, they takeprofessionals to operate them.
They take professionals tocreate budgets for them.
You need to understand, youknow, what the life expectancy of
all the equipment is and, youknow, budget accordingly for repairs
and maintenance and upkeep andall those things.
Right.
And, you know, wastewatertreatment, they could be, you know,
minimum million bucks up ashigh as, like, $3 million.
And if you buy a park that'sgot one that's failing, not only
(32:13):
do you have a money problem,but you also have a problem to where.
Yeah, absolutely.
Residents that can't livethere if they can't have their sewage
treated.
Right.
So same thing with, like, awell system.
Same thing.
I knew a guy who bought apark, and he's like, oh, I got it
on seller financing, you know,creative, this deal and stuff.
And, you know, I was talkingto him, and, you know, I was just
intrigued, asking a bunch of questions.
(32:33):
And first question I usuallyask him, like, oh, I'm just curious,
like, was it on a.
You know, I say, I use septicsystem, but, you know, private systems,
or.
Because it was like, 15 homes,it was small.
And I'm like, Or, you know,was public and stuff.
He goes, oh, good.
He's looked at me.
He's like, oh, that's a good question.
I don't know.
And I'm like, don't know.
(32:54):
I'm like, if you have to go,like, you know.
And again, you.
You know, parks like that.
I'm like, it could be 15little separate septic systems.
Or I'm like, you have no idea.
He's like, no, but I got agood deal, and I haven't put any
money into it.
And I was like, oh, my God.
Oh.
So it was somebody, you know,basically, you know, own some real
(33:14):
estate.
And I was like, oh, I wantedto buy a mobile home park, and somebody
offered it to him.
And, you know, he's like, oh,I didn't have to, you know, basically,
seller financing.
Didn't have to put it, youknow, put very little money down
into it.
Now he's trying to figure itout on the fly.
And I'm like, oh, that's not agood way to figure out real estate.
So, yeah, no, I mean, like, there's.
There's certain propertiesI've seen over the years.
Maybe, like, small parks like that.
Or in rural markets or, like,they have, you know, failing systems.
(33:37):
It's like, you couldn't giveme that.
Like, really, like, even justbecause you got it for free doesn't
mean that you actually shouldtake it.
Right.
Because now not only it couldactually cost you money, but liability.
There's some major liabilitythat you step into when you've got
residents that you're supposedto serve and, you know, if they're
in a well system or, you know, they're.
There's sewage that's flowingthrough the park because your system's
failing, it's a big deal.
(33:57):
And you might end up on thefront page of the newspaper for the
wrong reason.
Yeah.
When people always, you know,ask like, oh, you know, what could
I get sued for?
And stuff like that, you know,with an LLC or whatnot, I'm like,
that's one of the ways youcould get sued because it's, you
know, basically common maintenance.
But as we wrap up thisepisode, I'm just curious, you know,
(34:19):
get your opinion of where youthink markets, real estate markets
are headed over the next kindof 12, 24 months now.
And, you know, now say justoverall markets, but and then also
in kind of the spaces that youplay in, you know, just love to get.
And again, nobody has acrystal ball.
Yeah.
This is not financial advice,people, you know, so.
Yeah, and I'm not, I'm not aneconomist, honestly, like, how we,
(34:41):
how we look at things is we,we, we intimately understand our
two niches that we're in.
And, and, and, and I, and I, you.
For, for me, it's alwayslocation first.
Right.
That.
So, like, the fundamentalshave never changed.
Who cares where rates are?
Who cares what prices are?
Who cares where foreclosurerates are?
It doesn't really.
It's all irrelevant.
Like, the general fundamentalshave not changed.
So first and foremost, ifyou're buying, and I can just speak
(35:05):
to, you know, mobile homeparks and parking, but it's really
applicable to every other typeof real estate multifamily, which
is struggling right now.
But if you buy, if you buy itin the right location, in an incredibly
desirable location as a highdemand and high need for your product,
and you buy at the right basisand you execute your business model
as you've laid out, then itshouldn't matter where we're at in
(35:28):
the economic cycle.
Right.
Like, you know, I think where,where things became challenged, you
know, and I'll speak tomultifamily because it's the one
that's having the hardest Timeright now is, is the overly aggressive
nature that that space got to,but also how aggressive the business
plans were as far as you know,you know, you know, double digit
(35:49):
rent increases weren't goingto continue forever, right?
Like a class C building andturn it to A high B, low A, like
the location plays into that factor.
Like yeah, absolutely.
Yeah.
At some, at some point likeyou know, you know the music has
to stop at that and so likeyeah, the fundamentals, like I think
the fundamentals has got outof whack and people just saw dollar
(36:11):
signs but didn't see reality.
And so again I just, justreally getting back to the basics
and I, and for us it's, it'salways been a slow and steady while
we've had a great last twoyears and we've grown significantly,
we've hired some great talentfor us it's like, you know, slow
and steady always wins therace and that's hard sometimes.
And I would say that some ofthe biggest shows that we had and
internally as an organization,more, more as it relates to myself
(36:33):
and my business partner.
Brian was in, in the heydaywhen there was a lot of capital flowing
around in 20, 20, 2021, 22.
He's, he's on the capitalraising side and we were turning
money away and I'm like Brian,I don't know what to tell like I,
I can't find deals that makesense, right.
And so we're not going to buy.
It's okay, things will changebut like we're not going to buy just
to buy.
And so for that reason we turnmoney away.
(36:54):
That probably went somewhereelse, right?
But it put us in a greatposition to buy when things made
sense to buy.
And so again it's all aboutjust playing the cycles.
It's a long term game, right?
Like this isn't a, you mightget a few pops in the first couple
of years if you're in the business.
But you know, just know thatlike you better have like a 20 horizon
really.
Like this is like get in andknow you just get settled, get settled
for the ride and you'll lookback in 20 years and be very happy
(37:17):
that you were patient and juststeady along the way rather than
trying to only hit home runs, right?
Like just hit really goodsingles and doubles every once in
a while.
You know, a home run or even agrand slam will come along.
But you know singles anddoubles and, but location is the
first and foremost.
Like if it's, if it's aninferior location, just move on.
I Don't like your, your buddy.
I don't care if you even getthe deal for free, right?
(37:38):
It's just, it's.
Nothing's ever free.
Nothing's ever free.
Move on.
No.
And two things that I sayrelate to us and that I preach a
lot that you hit, hit on isagain the singles and doubles.
And unfortunately everythingon the Internet and social media
today is basically like thehome runs at a grand Slams.
And then the other is get richquick, people.
(38:01):
Oh, make this much your firstyear or that year or you can do this
or you can do that.
You know, people, you know,real estate is the long game.
And you mentioned 20 years.
You know, that's, you know,that's a long time for people.
And people got to realize, youknow, the way the markets work.
And I remember I bought myfirst house in 2001 and I sold it
in 2004 and basically itappreciated about 3% to 4% per year.
(38:26):
And by the time you paid, youknow, the closing costs and everything
else and the brokers andagents, I'm like, you know, I paid
225 grand for my first house.
Now I may have made like 10 or15 grand on it, which I'm like, wow,
that's a lot of money and stuff.
And I think people got spoiledby all the money that was in the
markets that people are makingon these deals, especially on some
(38:49):
of these single family andother deals where, you know, you
buy a house and it's worth$50,000 more, just like it was in
0607 and you know, early 08and like, oh, real estate's easy.
I'm going to be a millionairein three years.
It's like, no, that usuallythat's, that's very rare for people.
And it's like anything, it's avery long play.
Not a.
(39:09):
Yeah, you can't look at thisas a 12 to 24, 36 month horizon.
You shouldn't look anythingless than, I'd say five to ten.
Five years I think is evenshort, but ten years.
Yeah, I always tell people,you know, you look at what you, what
it looks like in 10.
Yeah, I agree.
And I, and there's faster waysto make money.
I mean, you know, like if youwant to go actively buy a business
(39:29):
and run a business, you know,outside of real estate, I, I think
that you can find incrediblereturns and an opportunity to create
cash flow and, but like you'regoing to be, you know, you're going
to be grinding there as well,probably even a lot more than that
of what you're, what you'regoing to do in your.
And whatever type of realestate you buy.
So, but it's again, you know,slow and steady really wins a race
(39:49):
in my mind.
And if you're, if you havethat mentality, I do believe that
you're going to find there'sgoing to be, you know, maybe it's
every, every other year, everythree years, you're going to get
those, those, those triplesand those pops.
Right.
That just, they just likeelevate your overall returns.
Right.
Wherever you're looking atmore of a linear.
What's the next 10 or 20 yearsgoing to look like?
You're getting these bigspikes that really elevate that overall
average return over that lifespan.
(40:10):
So.
Yep.
So, yeah, I mean, you lookback 20 years from today, and that
was 2005, things were popping.
And then of course, you know,we know it happened a few years later,
but I bet you everybody whoowned property in 2005, wherever
it was located, if it was agood location, still wish they held
it versus probably selling itor forced to sell.
So I'm one of those.
Yeah.
(40:31):
Great.
Well, Kevin, thanks for comingon today.
How can people reach out to you?
Yeah, no, I appreciate that, Chris.
If you want to learn moreabout Sunrise Capital Investors,
our group, you can go toinvestwithsunrise.com we've got a
lot of good resources there.
We've got our, our currentofferings up there.
We got some webinars, but wealso got case studies of, of deals
that we've, that we currentlyown, deals that we've gone full cycle
(40:52):
on.
And outside of that, you know,I'm pretty active on LinkedIn and
Instagram and a little bit onFacebook as well.
But my name's unique enough towhere just type in my first and last
name, Kevin.
Last name, bup, Bull on any ofthose social platforms and, and I
should be the first one thatcomes up there.
But I, I'd say LinkedIn of allof them, I'm pretty active on, but
you can reach out to methrough any of those platforms as
(41:12):
well and, and get a response.
Yeah.
And if people are interestedin, again, investing in their offerings,
if, you know, you know, themotorhome parks or the parking, which
again, I don't see a lot ofpeople, operators sponsoring those
because it's such a niche andwhen you can find somebody with that
expertise, it's somebody thatyou kind of want to hold on to.
So appreciate you coming ontoday, Kevin.
(41:35):
And as always, for peoplelistening, if you like this episode,
please share it with yourgroup and leave us a review on your
favorite listening station.
So thanks for coming on,Kevin, and thank you all for listening.
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